< The 2014 All-Japan Research Team

Takashi Enomoto & team
Bank of America Merrill Lynch
First-place appearances: 0

Total appearances: 4

Team debut: 2011

Rising from runner-up after three years to notch his strongest showing to date, Bank of America Merrill Lynch’s Takashi Enomoto seizes second place, wowing investors with his “regular and timely updates on the key drivers that influence the chemicals sector,” as one client says. The researcher expects Japan’s chemicals names to rebound this year, primarily in the specialty segment. From its May high point last year through December, the sector fell 11.3 percent, trailing the broad market by 13.4 percentage points; as of mid-March it was down 9.7 percent further but ahead of the broad market by 1.3 percentage points. “The current share prices are not strong overall, due to China’s economic fundamental weakness and weak electronic-materials demand,” he advises, “but some of this weakness is from seasonality, so we expect recovery during the spring season.” His favorites specialty names are Osaka-based Daicel Corp., Kansai Paint Co. and Nippon Paint Co.; and Tokyo’s Sumitomo Chemical Co. Looking into the second half of the year, Enomoto forecasts that “weak petrochemicals and commodities products are concerns, but specialty products should grow thanks to demand in autos.” In particular, paint volume growth in Japan and in such emerging markets as China, India and Southeast Asia is driving earnings for his preferred companies, the analyst notes, and rising materials costs are being offset by cost-cutting initiatives as well as rising demand from the autos, construction and shipbuilding industries. Enomoto also merits a runner-up position this year in Metals.